Thoughts on the Canadian Election

Over the course of the Canadian election that took place last Monday, our new Prime Minister made 174 different promises to Canadians. These promises were enough to win a majority government – something that according to most polls prior to the October 19th election wasn’t going to be possible. Someone much smarter than I am has started a site (TrudeauMetre.ca) that tracks all 174 of the promises made, as well as the sources of where these items were arrived at, which to me is important, because it provides some level of transparency to the site and would allow readers to know where the site author has pulled the information from.

I am an outlier when it comes to most of key demographics that the government is trying to effect through changes in government policy. I lean closer to Libertarian than any other party, if I were to call myself anything – I would prefer significantly less government involvement in my life and the money I make than I’m currently experiencing. Canada, being a semi-socialist country isn’t the best place to have this kind of political view, so I vote on the party that socially shares similar outlooks and assume that at the fiscal level, (based on previous governments) all of the parties are going to generally end up in the same place.*

I usually don’t get super interested in any kind of government platform, because they’re all the same. With the Liberal government, there were a few things that do interest me.

Tax Break of 1.5% – Anytime someone’s going to give me more money for doing basically the same thing and not really have it effect my life too much, I’m okay with that. I’m skeptical that the money will be made up by the new tax bracket created for income earners of over $200,000, but that’s not big news because I’m usually skeptical over most things that are promised to me by anybody.

The middle income tax bracket is on income from $45,000 to $89,000, so the most that this tax break will provide is around $600 ($150 per $10,000) – not a big deal to most people, but it’s a nice gesture.

End of First-Past-The-Post Voting – I would prefer that this kind of change to be coupled with a some sort of mandatory voting rule, with a token fine that would perhaps provide some incentive for citizens to vote. A change to the method of voting would give people a chance to actually make their vote count to the entire election. I live in an area that has voted in a Liberal government in every election provincially and federally for the past 18 years that I’ve lived here. Due to the makeup of the population, my vote has no impact on the entire population, which is pretty frustrating.

Marijuana Legalization – I am not a pot smoker / consumer, but the Liberal party’s stance that the current “war on drugs” that has been held for 30+ years is not effective in controlling drugs. The demand for pot has not really changed in the past few decades, but the only people making money off of this are drug dealers, who don’t pay taxes or offer legitimate taxable jobs. Creating a “cleaner” industry from a current illegal industry makes sense to me. It seems to have worked for Colorado and Washington, money rolling in and few problems created.

Other than these, I think I’m with the other approximately 45% of people who voted Liberal – I’m just hoping for some sort of change. I’m cynical, but to me, I really don’t think our previous federal government even tried to identify with the population – they had their own agenda of Canadian “Right Wing” politics and ran with that, no matter what the polls showed citizens wanted. If our new government fulfills even half of the 174 promises they ran on, I’ll be happy – to me, it at least acknowledges what people are interested in for their country.

 

 

*At both the provincial and federal levels, we work in this weird cyclical churn of parties where we vote one party into office, they do what they do for a few years and then we get mad at them about something they’ve done. The opposition parties provide new promises that will make our world better and we eagerly vote them in, only to have the cycle repeated. No Canadian political party is going to come in and slash income taxes (and the services associated with those taxes) more than a few dollars a year.

Playing the Game

The first job I ever had was horrible. I worked at a chicken farm gathering eggs on weekends. The job was very manual, and entailed me pushing a heavy-duty metal cart up and down very dusty and smelly rows of tightly caged hens picking up 4 eggs per hand and throwing them down into 30-egg flats over and over again for 3 to 5 hours (depending on what stage the chickens were at). At the end of the day, I would have averaged around 10,000 eggs gathered and needed to take a twenty minute shower to get the smell of the barn off of me. I was paid piecemeal, at (if I remember correctly) around four or five cents per dozen – it didn’t work out to a lot of money, but for an eleven year-old, it was quite a bit more than I had been making prior to that.

My parents instilled the habit of saving to me early, and would not let me just spend the money how I wanted to. I was “forced” to save money, and given very little access to the majority of funds. Through my parent’s investment advisor, a mutual funds investment, which I still remember (over 20 years later) being a Templeton emerging markets fund. Every weekend, I would check the finance section of the local newspaper and watch my “fortune” shrink and grow.*

One thing that I was allowed to buy was a Sega Genesis. My mom ordered this for me from the Sears catalog (I lived in a small town that had no electronics store, and this was pre-Internet 1991), and I had to impatiently wait the 3 to 5 business days for this awesome new toy to show up. My first ever game was “Sports Talk Baseball” and I probably played that for hundreds of hours – whenever nobody was watching our family’s one television that had 4 channels, I was on my Genesis, probably killing brain cells.

Since my Sega Genesis, I moved on to a Playstation 1, 2, and 3, as well as owning a Wii and X-Box 360. These days, I don’t play as many video games – It’s not due to anything other than I have other stuff I’d rather do – read more books or watch more sports, or spend more time with my wife. For 15 or 20 years of my life though, I probably averaged around two hours of video games per day. I liked the challenge of starting off in a game, being TERRIBLE at it, and slowly but surely getting better and better, gaining skills (useless skills in real life, but skills nonetheless) until I hopefully beat the game.

Personal finance is similar to video games. My personal finance life started with that terrible job, and having a savings plan strictly imposed on me by my parents, and continued on until today. Along the way, I have learned quite a bit from both experiences as well as following people’s lessons who are much smarter than I am. I somehow single-handedly paid for a University education, as well as the loans associated with those. I bought my first car, got a place to live, and paid off the entire mortgage of my house.

Similar to the video games that I probably spent too many hours playing, the whole process of personal finance is basically a grind. You save relatively small amounts of money, and slowly but surely through experience, luck or skill build up confidence and assets until you’re hopefully in a position that you can win. In my case, winning will be having a large enough portfolio that my wife and I will be financially independent by the time I’m 45.

Right now, I’m kind of at the beginning of the game – my portfolio is fairly small, the investments held are creating very little overall wealth on their own, and it’s kind of a frustrating process. I read as much as I can about investment planning and investment vehicles, but I am still pretty much a rookie at the whole “put money here and it will hopefully be worth more than it is now in a few years” strategy. Hopefully as time goes by, my odds of winning “The Personal Finance Game” will increase significantly.

*While I was writing this, I looked up the historical performance of this fund, and it has remained at essentially the same price point over the past 20 years.

A Different Kind of Anniversary

This past weekend, my wife and I had a few friends over for a barbecue. I cooked a bunch of meat and baked a couple of pies, and other than having to watch the Blue Jays go down 2-0 in the American League Championship series (I was one of those people who launched themselves onto the baseball bandwagon in August, after having given up on the team for the past decade or so) it was a really fun evening.

Besides celebrating a nice weekend in October that we were home for (as opposed to traveling somewhere in the province), we were celebrating a full year from my vasectomy surgery I had last year. I figured the opposite to the day of anxiety, pain, and mostly sitting around playing video games I had last year would be to have some friends over to enjoy a few drinks, some board games and have some fun – a “Vasectiversary” celebration is what my wife and I came up with for the occasion.

My decision to have this surgery a year ago was not made quickly – I did an excessive amount of research on the possible negative outcomes that could come from it, to the point that I pestered the urologist enough with questions that he ended up saying “Look, there are risks that will come from any surgery – I’ve done thousands of these, and have had almost zero complications reported from my patients. You’re aware of the risks and what the procedure entails, and have to decide whether the outcome is worth the minimal risk.” Besides the research, I gave myself 4 months between the consultation and the surgery, both to move the date until after golf season (VERY important to me). The four month break gave some more contemplation time after the surgery was booked and “real” – time to back out.

We made our decision to be “Childfree” after quite a bit of thought as well as looking at what our priorities in life would be. The decision for surgery was mine to make alone, although my wife was willing to go through the female version of the surgery as well – it just seemed easier and a less invasive procedure for me, rather than my wife to go through with it. A year later, both my wife and I are very comfortable with my surgery decision. The things we like to do with our life didn’t seem that it would be overly enhanced by adding dependents to – to the point that we don’t even own a cat as it would be abandoned while we left for weeks of vacation or weekends away from our house to visit friends or families around Ontario.

Financially, not having dependents to look after is a boon. While I understand children can be raised as economically as a parent wants, at the same time, not having the expense at all is significantly cheaper. One of the main reasons we can even contemplate Early Retirement is due to us being able to focus all of our “financial might” (of a moderate middle class dweller in Canada) towards this goal, instead of being dragged all over the place by conflicting priorities. The additional benefit of not having dependents is that we can be overtly selfish in our lifestyle and career. As long as we can support ourselves, there really isn’t any further obligation. If I felt like quitting my semi-stressful job tomorrow, in order to reduce the hours I work or restart a career in some other vocation, I could with no real effect to my household – this by itself is freeing.

The Savings “Addiction”

I’ve read personal finance blogs for over a decade, since blogging started to be a thing. My tastes in what I read have shifted from when I first started out my financial journey. Initially, I was very interested in authors who wrote predominantly about frugality and major money-saving techniques. This phase was probably the one that drove my wife completely nuts, as I was perhaps a little intense in implementing major money-saving techniques (something that she had never thought about doing). I never went as far as forcing the household onto single-ply toilet paper, re-using ziploc bags, or drying out paper towels for re-use, although if you asked my wife, I did go a little nutty for a while in an attempt to reduce the waste I saw in my house.

One blog that I still read on a semi-regular basis (although probably not as much as I should because there is a lot of goof information and analysis there) is Dividend Growth Stocks. One part of his blog that I really enjoyed reading about when it first came out was his pocket change portfolio.  I think the premise of this portfolio initially was to take the small amounts of money that was being made from writing posts, and turn that into dividend cash flows for a “fun” portfolio. After 7 years, his “pocket” change portfolio is making almost as much money as my wife and I would need to live on in retirement. I really like this idea, and have thought about doing it for a while. As a way of saving my change, I fill up an empty 100-ounce whiskey bottle (Canadian Club, from my younger and much more foolish days) and every year or two I’ve counted it out and spent it. With the abolishment of the penny, it’s taking me a lot longer to fill the bottle up this year, but it expect there to be significantly more money in there than the last few times.

The last time I emptied out the jar, my wife, who enjoys the tedious task of counting and rolling change, came up with a final count of about $450 – I’d think there would be at least $600 in there, which would be a good start to any sort of “mini-investment” project that I would take on. I could put $600 into an investment account and earn dividends off of it forever, much like the writer from Dividend Growth Stocks. This decision would be probably the most responsible thing to do – create more cash-flow for myself from “free” money forever.

My problem with any savings plan I implement, is that I have a hard time spending any money on anything. I allocate so much of the money I earn at my job to retirement savings right now that it doesn’t really leave a ton of money for some “fun” things – I’m more addicted to saving money than I am to spending it on anything – fun or not. While the savings addiction is beneficial to my current goal of amassing enough money, it is not beneficial when all I end up doing is having separate savings account for various future goals that I haven’t even thought of yet.

I haven’t really decided if it’s a good thing or a bad thing – I could use the $600 to buy a new cell phone next year, but my own “pocket change portfolio” funded with free money is probably a better idea – the decision I have to make is when to stop saving.